Know your monthly payment before you borrow
Whether it is an auto loan, a personal loan, a student loan, or financing a large purchase, an installment loan works the same way: you borrow a lump sum and repay it in equal monthly chunks until the balance reaches zero. The catch is that two loans with the same monthly payment can cost wildly different amounts in interest depending on the rate and how long you stretch the term. Enter your amount, rate, and term to see both the monthly figure and the full interest bill before you sign anything.
Worked example: $200,000 borrowed at 7% for 30 years
Borrow $200,000 at a 7% annual rate over a 30-year term and your fixed payment lands at about $1,331/month. Across all 360 payments you hand back roughly $479,018 — meaning the interest alone comes to about $279,018, more than the amount you originally borrowed. Cut the same loan to a 15-year term and the interest falls to around $123,585: the shorter you borrow, the less the loan ultimately costs.
When this estimate falls short
This calculator assumes a single fixed interest rate and equal payments for the entire term. It will not match a loan with a variable or promotional teaser rate, and it does not factor in origination fees, prepayment penalties, late charges, or insurance that some lenders bundle into the financing. The advertised APR on an offer can therefore differ from the plain interest rate you enter here. Treat the output as a like-for-like comparison tool for shopping rates and terms — not as the exact figure on a signed loan agreement.
Common loan questions
How is a loan monthly payment calculated?
The payment is whatever fixed amount, charged every month, exactly clears the borrowed sum plus interest by the final installment. The standard amortization formula solves for it: M = P × [r(1+r)^n] / [(1+r)^n − 1]. Here M is the level monthly installment, P is the sum you borrowed, r is your annual rate expressed as a monthly fraction, and n is how many installments you make in total. Because the rate is applied to a shrinking balance, each successive installment carries a little less interest and chips a little more off what you owe.
How do I calculate mortgage payments?
Mortgage payments use the same amortization formula. Enter your loan amount (purchase price minus down payment), the annual interest rate from your lender, and your loan term — typically 15 or 30 years. The calculator shows your fixed monthly principal-and-interest payment. Your total monthly housing cost will also include property taxes, homeowner's insurance, and possibly PMI, which are separate from this calculation.
What is loan amortization?
Amortization is the schedule that splits each fixed payment between interest and principal. Early on, when the balance is highest, most of your payment is interest and the principal barely moves; with every payment the interest share shrinks and the principal share grows, so the loan pays down faster toward the end. On a short auto or personal loan you feel this far less than on a decades-long loan, where the first years are interest-heavy.
How much interest will I pay on a $200,000 loan?
Total interest depends on your rate and term. At 7% over 30 years, a $200,000 loan accrues roughly $279,018 in interest — more than the original balance. Shorten the term to 15 years and that drops to about $123,585. Use the calculator above with your exact figures to see a precise breakdown, including the year-by-year amortization summary.